The banks argue the increases have been spurred by new regulatory changes requiring banks to hold more capital against mortgages, to cushion for potential losses in the event that property prices dropped and the assets weren't worth as much.

Federal Treasurer Scott Morrison said it was up to each bank to respond to regulatory changes.

"Banks will make their own commercial decisions about how they charge customers in relation to shifts in their cost base," Morrison told media in Sydney.

"There's no mandatory requirement on behalf of the Government to pass on costs to consumers and different businesses will have different capabilities to do that and at the end of the day customers can choose where they want to bank and shop and buy their milk."